KW: Many have been sounding the alarm over the level of global debt. The International Monetary Fund (IMF) is now making those concerns central to its platform. According to the IMF’s latest report it warns that “speculative excesses in some financial markets may be approaching a threatening level.”
One area that’s especially dangerous is the leveraged loans market. These loans are generally “arranged by a syndicate of banks, to companies that are heavily indebted or have weak credit ratings.” They are effectively provided to companies already swimming in debt. There’s a massive $1.3 trillion global market of leveraged loans. The biggest culprit is the U.S. It “was by far the largest market last year, accounting for $564 billion of new loans.” Here’s why that market could explode by next year.
By Tobias Adrian, Fabio Natalucci, and Thomas Piontek November 15, 2018